alertmeipp Posted April 30, 2009 Share Posted April 30, 2009 I got more ORH than FFH. They are pretty much the same company with the same investment philosophy. ORH appears to be cheaper now based on book. But I figure FFH may move faster because Prem is getting his well-deserved attention these days... Thoughts? Link to comment Share on other sites More sharing options...
valuecfa Posted April 30, 2009 Share Posted April 30, 2009 Without getting into details, I favor ORH at current prices. Though FFH is fairly cheap as well. Link to comment Share on other sites More sharing options...
valuecfa Posted April 30, 2009 Share Posted April 30, 2009 Do folks here think that an ORH buyout is likely (over the next year) given its small float, ongoing buybacks, and cheap valuation? Link to comment Share on other sites More sharing options...
Smazz Posted April 30, 2009 Share Posted April 30, 2009 I just want to say that the title of this thread may break the record for most times being the Subject if a topic..lol... Link to comment Share on other sites More sharing options...
Viking Posted April 30, 2009 Share Posted April 30, 2009 Smazz, yes we seem to keep coming back to this topic... but I can't help myself! Regarding ORH, now that FFH ownership has grown from 60% to 70% it would appear to make a takeout more likely (30% is much easier to come up with than 40%). Let's apply the same takeout valuation for NB = 1.2xBV = 1.2x$45.37x18 million shares = US$980 million. ORH has $540 million that could (?) be passed up as a dividend (if they were wholly owned). Looks possible but my guess is this sort of thing would compromise FFH financial position too much which would not be great in the current environment. Perhaps what we will see over the next 12 months is for FFH to have a solid year and continue to re-build their cash holdings back up to $1.5 billion (based on 2008 year end earnings they should be able to get solid dividend payments from Crum, NB and runoff should also be paying a special dividend again this year). One concern I have with ORH is that their small float will stop large investors from buying and that this will hold back the share price. On the more positive side, ORH has the ability to purchase another 10 million shares. If shares trade much lower and earnings come in decent this year they will be able to buy at .8 x BV which should put a nice floor price under the shares. Regarding which is cheaper (ORH or FFH), ORH is cheaper when simply looking a share price to book value. However, they are quite different animals when it comes to insurance and I am not sure how one would value runoff at FFH. Link to comment Share on other sites More sharing options...
Crip1 Posted April 30, 2009 Share Posted April 30, 2009 I posted a poll on this a few months back where the options were ORH, ORH.A and FFH and ORH was the clear loser. Of course, ORH was about 25% higher priced at that point and ORH.A was priced about 5% less that it is currently selling for. Obviously, the voting then was less about the virtues of the respective firms/issues and more about the price vs. value considerations. Right now, I have to say that they are pretty even with a slight tendency to go with FFH if for no other reason that there is a higher upside. Time will ultimately tell, but the various smaller acquisitions of Polish Re and others past and future suggest to me at least that FFH a little more attractive at current prices. It is not unlike going into a restaurant and pondering whether to go with the Porterhouse or the Filet. I have opted for the Porterhouse. -Crip Link to comment Share on other sites More sharing options...
oec2000 Posted April 30, 2009 Share Posted April 30, 2009 It is not unlike going into a restaurant and pondering whether to go with the Porterhouse or the Filet. I have opted for the Porterhouse. Hey, why settle for one when you can have the buffett - I'm having the Porterhouse, the Filet MIgnon and the lobster! ;) Crip, just out of curiousity, were the poll results right - in terms of relative performance from then till now? Link to comment Share on other sites More sharing options...
Crip1 Posted April 30, 2009 Share Posted April 30, 2009 Good question. The last post was 12 February so I used that date: Votes Performance 12-Feb - 30 Apr ORH 1 -27.64% ORH.A 4 +4.83% (Which I do not believe includes dividends) FFH 18 -22.03 Link to comment Share on other sites More sharing options...
treasurehunt Posted May 1, 2009 Share Posted May 1, 2009 oec2000 says: "Hey, why settle for one when you can have the buffett..." There are plenty of pretenders around who write "Buffet" when they mean "Buffett". You must be a true Buffett cult member to do the opposite: write "buffett" when you meant "buffet"! No offense meant, I just found this funny. Link to comment Share on other sites More sharing options...
Smazz Posted May 1, 2009 Share Posted May 1, 2009 Smazz, yes we seem to keep coming back to this topic... but I can't help myself! Hey, its all good - Im tuning in ;D Link to comment Share on other sites More sharing options...
oec2000 Posted May 1, 2009 Share Posted May 1, 2009 You must be a true Buffett cult member to do the opposite: write "buffett" when you meant "buffet"! Haha! Call it a freudian slip. I am not in Omaha for nothing. ;D Link to comment Share on other sites More sharing options...
Phoenix01 Posted May 1, 2009 Share Posted May 1, 2009 I took the opportunity of the rally to bail out of my ORH shares and replaced them with an equal amount of ORH.A and ORH.B. I think the summer will not be kind to stocks, especially those that are vulnerable to hurricanes. I am happy with the 10%+ yield for my parked money and I think that I also get some sort of protection against treasury fluctuations. Link to comment Share on other sites More sharing options...
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